Phl Prudential rejoinder to Ocampo’s columns

This is in response to Mr. Satur C. Ocampo’s two most recent op-ed column articles: “Parallels: Pork Barrel, Insurance, Pre-Need Scams” which was published in your issue of Saturday, 24 August 2013 and “Insurance, Pre-Need Scam: A Public-Private Partnership” which appeared on Saturday, 31 August 2013. In light of the customer concerns that were raised and discussed in these two articles, Philippine Prudential Life Insurance Company, Inc. (Philippine Prudential) is issuing this explanation and clarification.

The customers-complainants referred to and quoted in both columns are Family First Future Provider planholders of pre-need company Berkley Plans, Inc., which purchased the Protector Plan (also known by Planholders as PNCB). The PNCB is a very affordable Group Term Life Insurance protection which came with five riders: Accidental Death Benefit, Permanent Disability Benefit, Hospital Income Benefit, Burial Benefit and No Claim Bonus. The “No Claim Bonus Rider” entailed no additional cost to the client.

Family First Future Provider planholders who enrolled in the PNCB were covered under a Group Master Policy issued by Berkley Plans’ sister-company, former life insurance company Berkley International Life Insurance Company, Inc. (Berkley International Life). In 2007, Philippine Prudential assumed the rights, interest and obligations of Berkley International Life as the insurer under the same Group Master Policy. Pursuant to law, Berkley International Life’s obligations were assumed by Philippine Prudential in view of the surrender of Berkley International Life’s license as an insurance company and its exit in doing business in the Philippines.

The PNCB’s sustainability was due to its maintaining a sufficient number of individuals covered under a Group Life Insurance Coverage. Thus, the Group Master Policy had expressly provided for a minimum participation requirement of all eligible Family First Future Provider planholders.

Group Life Insurance (wholesale life insurance or institutional life insurance) is Term Insurance covering a defined group of people, such as company employees, union or association members and, in this case, the Family First Future Provider planholders. Individual proof of insurability is not the primary consideration, but more of the size, turnover and financial strength of the group.

Over the years, the number of individuals enrolled under the PNCB had dwindled due to various reasons. At present, enrollment under the PNCB is way below the initial coverage and has fallen below the minimum 75% mandatory participation. This makes it no longer sustainable for Philippine Prudential to continue with the coverage.

Given that the minimum participation requirement was not met, Philippine Prudential has exercised its rights granted under the said Group Master Policy to terminate its coverage with the pre-need provider, which is the actual policyholder, effective 25 March 2013. Continuing with this policy would result to unsound insurance business which the Insurance Commission of the Philippines will not allow.

Philippine Prudential had previously assured all concerned planholders that their periodic premium payments did not go to waste since they were fully covered under the Protector Plan or PNCB during the entire time it was in force. Since no premiums were collected for the “No Claim Bonus Rider,” the company remains under no obligation to maintain the coverage.

A series of consultations among the Insurance Commission, Philippine Prudential Management, and representatives of the concerned planholders were recently held to discuss the issue. As a result of these meetings and as a gesture of goodwill, Philippine Prudential has offered to refund to these planholders a substantial portion of the premiums paid by them. After four mediation conferences, however, the company’s offer and the specifics of its implementation were not accepted by the claimants who still insisted on a full or 100% refund of their premiums.

Nevertheless, Philippine Prudential has kept its “Goodwill Offer” open until 30 September 2013, as recently announced via print ads in major daily newspapers (including The Philippine STAR) and live-on-air on various top-rating public affairs radio programs. In just the last few weeks, a majority of the PNCB Clients who have responded to our announcement have already accepted our offer. We optimistically foresee a great deal more to avail of this before the above deadline.

Furthermore, Philippine Prudential continues to assure all of its regular Policyowners, and the public in general, that the Company remains stable, financially strong and capable of meeting all of its obligations as a reputable and duly-licensed life insurance company by the Insurance Commission. It is most unfortunate that current circumstances have construed Mr. Ocampo to place our company in the same category as those with serious reputation issues.

With the explanation above, we wish to reiterate and emphasize that, contrary to the claims of the customer-complainants as published in Mr. Ocampo’s column, our company did not “unjustly terminate” our coverage due to a “technical clause” in the Group Life Master Policy. The termination is legally valid under the strict terms of the insurance contract. We thus hope that our side of this story, through this letter, be afforded an equal opportunity to be published.

Our clients and other concerned parties may, therefore, continue to contact the Philippine Prudential Customer Service Hotline at (02) 9022300 or email: [email protected] for further inquiries.

Thank you and all the best to you and all of your colleagues at The Philippine STAR. — RODOLFO C. ESTRERA, Head, Corporate Communication Office, Philippine Prudential Life Insurance Company, Inc.